Good question but for me the answer is a little complex. Like I said above, my friend also had a guitar and we would split the food and money (and the drugs we bought with the money). I always appreciated the food mainly because it meant we didn't have to fly signs or beg for anything to get nourishment. Cops tend to shake down panhandlers and they also annoy people, so begging or flying signs was like a step down from busking, which entertains people.
The only time I ever turned down food was when we took a bus to a tourist town and actually got too many boxes of food to where it was more than we could eat or even give away to other folks that lived outside. We had a stack of styrofoam boxes a few feet high and were like enough, give us money, cigs, or nothing at all. But that was only one time and we didn't want the excess food to go to waste.
All that said, now that I'm housed and able to reflect back on my experiences from nearly 20 years ago, if I approach someone who needs resources I try to determine on a case by case basis how I can help them based on their vibe. If they are aggressive, rude, or insist on cash only after an offer of clean socks or something, I might tell them to fuck off. If they are appreciative of leftovers or a bottle of water, I might consider doubling down unexpectedly and dropping them a 5 or 10 dollar bill. When I had a truck I would sometimes pick up a hitchhiker and let them ride in the bed and throw them a 20 after dropping them off.
As far as what they choose to spend it on, I try not to let that interfere with my generosity unless, like I said, they are being pushy about it. Some of them are addicts like many of us and may be dopesick or suffering withdrawals due to their situation. I've been there so who am I to judge? As long as they aren't sticking people up or robbing banks, they might be using drugs to self medicate unmedicated mental illness or to simply cope with the harsh realities of living on the streets. Remember, Harm Reduction does not always mean abstinence. Sometimes the more compassionate thing to do is give someone clean needles, some narcan, or a few bucks to help them score and fight off WDs. Or if you are an angel sent from Heaven like our friend
@jasperkent, you might throw them a doobie or bag of weed.